Egypt increases price of fuel

The price rises are to fund an increase in salaries for civil servants.

06 May 2008 15:25 GMT

People have protested outside Egyptian embassies against the cost of living in Egypt [AFP]

There have been protests in the country over the cost of living, with 50 per cent of Egyptians living below the poverty line.

Hani al-Husseini, a tax expert and member of the Tagammu opposition party, said: "The government is giving with the right hand and taking back with the left hand."

The lower house of parliament approved the measures, proposed earlier in the day by the ruling party, by 297 votes to 76.

Fathi Sorour, the parliament speaker, had called for an urgent decision on the proposal.

The civil servants' pay rise will be forthcoming only if necessary revenue can be found to support it.

Ahmed Nazif, the prime minister, told a news conference the price rises would go into effect at 9pm 19:00GMT, and would generate 12bn Egyptian pounds ($3.6bn) for the budget.

He said public transport fares would not rise. Asked whether the combination of wage increases and price rises would affect inflation, Nazif said: "It won't have any negative effect on inflation because the money to finance wages is coming from real sources."